PESHAWAR: The Peshawar Bus Rapid Transit is facing closure as the dues to be paid by the public transport’s operator TransPeshawar to contractors since August has surged to Rs1.4 billion due to the failure of the cash-strapped provincial government to make subsidy payments to it.

The BRT operates a fleet of 244 buses catering to around 300,000 commuters on a daily basis.

Sources told Dawn that the finance department hadn’t released subsidy payments to TransPeshawar, a government-owned company responsible for bus service operations, since August.

They said that the department had issued orders on Oct 17 for the payment of Rs186.6 million to the company but action on them was awaited.

TransPeshawar to pay Rs1.4bn dues to BRT contractors, say officials

Official documents available with Dawn show that on Oct 13, the transport and mass transit department wrote a letter to the finance secretary seeking the release of Rs586 million for BRT operations.

“The requisite funds amounting to Rs 586 million may be released at the earliest to ensure uninterrupted operations of BRT and avoid any untoward situation as Daewoo Pakistan [service operator], has also informed the service will discontinued for October 19, 2023,” the letter read.

The finance department later ordered the payment of Rs186.6 million to TransPeshawar but the orders have yet to be complied with.

The documents reveal that BRT contractor Daewoo Pakistan approached the TransPeshawar and transport department on Oct 4, Oct 12 and Oct 13 demanding the immediate clearance of dues.

In an earlier letter written on Feb 23, the company warned that failure to meet the commitment of funds by Oct 31 would have “critical repercussions” as the outstanding amount until Oct 31, 2023, would accumulate to Rs950 million.

“This outstanding amount is indispensable for our ability to procure essential resources including diesel, lubricants and spare parts, and to meet our obligations to our dedicated employees in terms of their wages,” it said.

Daewoo Pakistan requested TransPeshawar to pay “overdue” payments amounting to Rs585 million for August and Sept 2023 before Oct 31 to ensure smooth operations of the bus service and “prevent any adverse consequences for all stakeholders involved.”

In a letter written to the operator on Oct 24, another BRT contractor LMK Resources Pakistan said it had over 1800 staff members deployed in the “whole system for operating and maintenance of intelligent transport system, station management, data centre, control center and other auxiliary equipment and consumables as well as subcontractor staff responsible for ticket sales, customer service, security and cleaning services.”

It added that under the contract, 100 per cent of its monthly payment should be made by the 15th of every month for the preceding month “We have been facing delays in our monthly payments and the due amount has again swelled to Rs 193 million,” it said.

The LMK Resources Pakistan said it had been managing that burden, paying staff members and subcontractors on time to prevent any issues during the difficult financial phase, continuing to deliver the service and meeting all expenses.

“Unfortunately, we have exhausted all our credit-lines and would not be able to process our subcontractors’ payment this month. This may result in non-payment of salaries to staff and consequently they may go on strike and cause service closure,” it warned.

A senior official told Dawn that BRT operator’s liabilities stood at Rs1.4 billion.

He said the current caretaker government had allocated Rs1 billion for the bus service in its spending plan unveiled on Thursday but that amount was “too small.”

The official said the delay in release of funds was caused by the financial crunch faced by the government.

Another official claimed that the payment of BRT dues would be made soon.

“Over Rs3 billion is expected from the French Development Agency, while a withdrawal application is currently under process,” he told Dawn.

The official said the previously unutilised 15 million Euros that was part of the original BRT loan by the Asian Development Bank was being transferred to the TransPeshawar to meet operational expenditure of the bus service.

“That money will be enough to meet expenses of more than a year,” he said.

However, another official said loan timelines were uncertain and the amount was likely to take at least 15 more days to arrive.

Published in Dawn, October 29th, 2023